MANILA - Cutting the reserve requirement ratio for banks "remains on the table," Bangko Sentral ng Pilipinas Governor Benjamin Diokno said Monday, following a surprise cut in the benchmark interest rate last June 25.
Further RRR cuts will depend on the domestic liquidity and credit conditions, Diokno told ANC.
The BSP on Thursday cut interest rates by 50 basis points to a record low of 2.25 percent, to help mitigate downside risks to growth and to boost market confidence, he said.
Bangko Sentral ng Pilipinas Governor Benjamin Diokno answers questions during the unveiling of the 20-piso coin at the Executive Business Center at the Bangko Sentral ng Pilipinas, (BSP) in Manila on December 17, 2019. Jonathan Cellona, ABS-CBN News
Diokno said the BSP would continue to monitor market conditions as the government gradually reopens the economy. Current money supply continue to expand, he said.
"The option to cut the RRR remains on the table as we’re monitoring the liquidity in the system," Diokno said.
"We have not actually fully opened the economy so we don’t know what would be the behavior of consumers and banks as we open up the economy," he added.
Metro Manila and other areas remain under general community quarantine until June 30, after emerging from an 11-week lockdown.
Diokno said the BSP is ready to use "full range of monetary tools" if needed. The BSP has cut the benchmark interest rates by a total of 175 basis points this year.
ANC, ANC Top, ANC Exclusives, RRR, reserve requirement ratio, interest rates, benchmark rate, monetary policy, Benjamin Diokno, Bangko Sentral ng Pilipinas